August 15, 2023 (MLN): Iron ore briefly slipped below $100 a ton to near its lowest intraday level since June, as investors weighed China’s unexpected interest rate cut with another slew of data that underscored the top metal-consuming economy’s sputtering recovery, Bloomberg reported.
Prices of the steelmaking ingredient have fallen about 13% from a peak in July as hopes fade that Beijing will be able to stimulate its way out of its economic funk. Key industrial metals including copper and aluminum have also been trending down.
On Tuesday, China’s central bank lowered the rate on its one-year loans by 15 basis points, the most since 2020, to 2.5% to bolster an economy that’s facing fresh risks from a worsening property slump.
The surprise move came shortly before the release of July economic activity data that showed industrial production, retail sales, and fixed-assets investment all grew less than expected, while the urban jobless rate rose.
Meanwhile, the latest crisis at major property developer Country Garden Holdings Co. is putting further pressure on China’s steel mills and the steel-making staple. The property sector accounts for about 40% of the nation’s steel demand.
“Iron ore may continue to trend lower” as demand was still lagging, said Wei Xinyue, an analyst with Horizon Insights. Still, the problems in the economy weren’t down to a lack of liquidity, Wei said.
Iron ore fell as much as 1% before trading little changed at $100.50 a ton in Singapore as of 08:19 PST. Futures in Dalian edged up. Copper gained 0.2% to $8,304 but remained near a one-month low, while aluminum was up 0.8%.
